Russia's Agriculture Ministry proposes to restrict sugar beet seed imports - paper

MOSCOW. Aug 9 (Interfax) - Russia's Agriculture Ministry has proposed to limit imports of sugar beet seeds by only allowing such imports according to the "historical principal."

The proposal was made by a ministry representative at a meeting on August 2, business daily Vedomosti reported, citing two participants in the meeting.

The meeting was attended by representatives of Russia's largest sugar producers, Prodimex and Rusagro , as well as sugar producers association Soyuzrossakhar and Soyuzsemsvekla, a joint venture between Rusagro and seed producer Schelkovo Agrohim. These companies and associations, as well as the Agriculture Ministry did not respond to questions.

It was not said at the meeting exactly to which companies that already import sugar beet seeds into Russia this historical principal would apply, the participants said. Previously seeds have been imported by Germany's Bayer (Russian entity JSC Bayer) and Syngenta, a division of China's Sinochem Holdings. These companies have stayed on the Russian market so far. They did not respond to questions.

The Agriculture Ministry began to restrict seed imports back in 2022 in light of the threat that foreign companies might stop working on the Russian market. In order to develop domestic production, as of 2024 the allowed amount of imports will be determined according to the formula "necessary amount plus reserve minus domestic production." The Prodimex representative said at the meeting that a total of 1.3 million tonnes of seeds, plus a reserve of 100,000 tonnes will be needed for the next planting of sugar beets.

Restricting seed imports by suppliers who did not previously import this product is supposed to encourage Russian companies to produce seeds inside the country, one of the meeting participants said.

Previously, with this same goal in mind, a decision was made to require foreign seed to form joint ventures with Russian research organizations in order to work in the country. The Russian partners are supposed to own at least 51% of these ventures.

The Rusagro representative said at the meeting that restricting seed imports and introducing imports according to historical quotas would lead to changes in prices, Vedomosti reported, citing its sources. But Soyuzrossakhar head Andrei Bodin said possible shortages and price growth should stimulate domestic seed production.

A senior executive at another sugar producer said margins on the sugar beet market depend on the high yields that foreign seeds can provide. If import quotas are imposed,

farmers' margins will drop or prices will change, he said.

It was reported earlier that Russia's sugar beet industry is more dependent than others on imported seeds, which have a market share of more than 90%.